Moody’s rates USI facilities B3, notes Caa2

Moody's Investors Service said it assigned a B3 corporate family rating to USI, Inc. (USI New) following the announcement of a $4.2 billion leveraged buyout of the company sponsored by KKR & Co. LP and Caisse de depot et placement du Quebec along with members of the company's management team.

The agency also assigned the company a B3-PD probability of default rating, B2 (LGD3) ratings to its $200 million five-year senior secured revolving credit facility and $1,795,000,000 seven-year senior secured term loan and a Caa2 (LGD5) rating to its $705 million eight-year senior unsecured notes.

Proceeds will be used to purchase equity from current owners, repay existing debt and pay related fees and expenses.

The outlook is stable.

The sponsors expect to complete the buyout during the second quarter, pending regulatory approvals and other customary closing conditions. At that time, Moody's said it will withdraw all existing ratings of USI, Inc. (USI Old) as its credit facilities and notes will be repaid/terminated.

Moody’s said the ratings reflect USI New’s favorable market position, good balance of property & casualty and employee benefits business and healthy free cash flow.

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